Monday, November 06, 2006

Fizz vid rips lid off ad biz

When half a dozen Mentos are dropped into a two-liter bottle of Diet Coke, they instantly create an explosive, yet harmless, jet of fizz that spectacularly spews a dozen feet in the air.

When an online video of this phenomenon is combined with the marketing might of Google and the Coca-Cola Co., you get not only an instant viral classic but also a perfect example of the explosive, and not quite harmless, changes about to roil the relationship between advertisers and the mass media who rely on them.

The fizz-vid genre was popularized in the spring by a pair of goggled geeks in white lab coats, who dumped dozens of Mentos into dozens of bottles of Diet Coke and posted videos of the elaborately choreographed eruptions at EepyBird.com. Links to the clips were gleefully disseminated by everyone from the Wall Street Journal to the authors of any number of emails, instant messages, blogs and MySpace postings.

Back then, it was all in good fun. Now, it has become serious business. And probably very good business, too.

Unlike the first effort – which was an adless, ad-hoc undertaking – the new fizz vid is being promoted by Google and sponsored by Coke and Mentos, the latter being a brand owned by Perfetti Van Melle S.p.A., the Italian confectioner. Google has sewn up exclusive rights to host the clip for the next six months.

Every time you click on the video, which is essentially a wall-to-wall product placement for Diet Coke and Mentos, Google gets paid a little something by the soda and mint companies. Every time Google gets paid, it splits a littler something with EepyBird.

National Public Radio reported that the first fizz vid was viewed more than 6 million times and that the new release was clicked some 620,000 times in the first week of its release.

Eager to surpass the success of the original video and, thus, enhance the return on its investment in soda and goggles, EepyBird offers every visitor the code that makes it possible to embed the video in a web site. When you click on the video below, you'll help feather EepyBird’s nest.

We don’t know how much Google is collecting for each click or what percentage of the revenue is being split with the video’s producers. But the speculative math gets pretty interesting.

If the second video does as well as the first, it would produce revenue of $1.5 million for Google at 25 cents per click. If the fizz kids collect a third of the take, they would earn $500,000 – or more than enough for a life’s supply of Diet Coke and Mentos. (Since the producers probably get free product, they should bank the proceeds against the day the fizz craze fizzles.)

In assessing the implications of this new advertising model, there are several winners, as discussed immediately below, and one big loser: The legacy media companies.

As to the winners:

:: Google adds a powerful new dimension to the pay-per-click advertising model that to date has depended largely on its search traffic, which, while historically impressive, probably can’t sustain its robust growth for an indefinite period of time. Google also is previewing the way it plans to capitalize on the $1.6 billion purchase of YouTube. In the process, it gains at least a partial solution for populating YouTube with safely un-copyrighted content, a problem that has been – and likely will continue to be – a major headache.

:: Advertisers add a low-cost, high-impact and highly targeted tactic to their arsenal. They are gaining a superior way to showcase their products in a welcome manner that will be well tolerated, if not embraced outright, by the young and restless audience they covet.

:: Individual content producers – or at least a lucky and talented few of them – will gain unprecedented outlets to showcase and, better still, actually sell their wares. In the wondrously viral way of the web, the new fizz vid urges viewers to enter their own home-baked (half-baked?) productions in a contest sponsored by Coke. To make it as easy as possible for other wannabe producers to help stock the shelves at YouTube, Google is soliciting contributions here.

The degree of success enjoyed by the above playes will determine how badly mass-media advertising is hurt.

Although many advertisers are eager to vector larger portions of their budgets away from the old media and into the new, they have been put off by the fragmented and unruly nature of the digital realm.

If Google can leverage the labors of independent content producers to create well targeted, mass media-sized audiences that can be delivered at lower-than-mainstream-media prices, then it – and other online imitators – will gain ever-larger slices of the advertising pie.

Google has the ability to usurp the last great advantage of the legacy media, which for centuries have thrived as one-stop shops where advertisers could buy lots of impressions for lots of money. Advertisers always knew that a good portion of their expendutures was squandered on readers and listeners who didn't care, but it was the best alternative they had. Until now.

If Google proves that it can efficiently synthesize large and psychographically cohesive audiences from countless bits of disparate content and billions of seemingly random clicks, then it truly has a chance to blow the classic paradigm to bits.

With production and distribution costs at essentially zero, Google would emerge not only as a highly effective advertising alternative but a hell of a bargain, too.

An inelegant variation on the theme

In another example of Google’s effort to become the Big Board of advertising, the company now is helping online keyword buyers buy spots in the New York Times, Washington Post and several other major newspapers.

The three-month newspaper experiment is similar to an ad-brokering program Google piloted in select magazines to “little success,” according to the Post, one of its new print partners.

As reported in the Times, 100 selected Google advertisers will be offered the opportunity to post ads in participating papers on a space-available basis within a range of dates. While advertisers can ask to be positioned in the particular sections of the paper, the publishers retain the right to decide whether and when the ad will run.

If you are in the turkey-baster business and depend on buying a certain amount of advertising to ship a certain amount product between now and Thanksgiving, would you entrust the fate of your enterprise to the uncertainty of this sort of arrangement?

About Me

Alan D. Mutter is perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.
Mutter began his career as a newspaper columnist and editor at the Chicago Daily News and later rose to City Editor of the Chicago Sun-Times. In 1984, he became No. 2 editor of the San Francisco Chronicle.
He left the newspaper business in 1988 to join InterMedia Partners, a start-up that became one of the largest cable-TV companies in the U.S.
Mutter was the COO of InterMedia when he moved to Silicon Valley in 1996 to join the first of the three start-up companies he led as CEO.
The companies he headed were a pioneering Internet service provider and two enterprise-software companies.
Mutter now is a consultant specializing in corporate initiatives and new media ventures involving journalism and technology. He ordinarily does not write about clients or subjects that will affect their interests. In the rare event he does, this will be fully disclosed.
Mutter also is on the adjunct faculty of the Graduate School of Journalism at the University of California at Berkeley.